A Day in the Life:

So we have a magnolia tree near to the front door and boy does that thing drop a lot of buds, petals and ultimately leaves onto our patio.

Its reserves seem to be endless and, if I didn’t know that it was just a dumb lump of oily wood with a bit of sap in the middle, I’d have to conclude that it’s doing the above on purpose, presumably in the hopes that I’ll repeat one of my falls and, after a bit of rainfall, I might be persuaded to do another one of those cartoon, windmill-armed dances on a bunch of mushed up petals before falling flat on my back.

And that won’t do at all so I’ve devised a plan.

First, sweep up the petals.

Second, get a saw, hack down some branches, make a lot of noise about it, wave them around in triumph and then throw them in the street.

Now it’s not a perfect plan, I admit.

Not least because the dog has eaten two brooms that we were foolish enough to leave outside and he appears to have buried our shovel. And nor do I have anything like a functioning saw. And I’m too lazy to sharpen the ones we’ve got, too mean to replace them and too worried that the police/council/neighbours might object if I go all Wicker Man on the remains. Hence inertia may have to function as Plan B. On to the news:

The News:

PUB, RESTAURANT & DRINKS PRODUCER NEWS:

• Yesterday we updated our views on the London leisure market. Comment can be found here

• MCA reports Rutland Partners has deferred its sale of Pizza Hut saying now is not the right time to “derive fair value” from disposal. Presumably that means they didn’t get the bids.

• Sale of Pizza Hut pulled. £150m price tag may have proved too rich – or could have been under threat given tougher trading. MCA quotes Jens Hofma, chief executive of Pizza Hut Restaurants UK as saying ‘we are staging an unprecedented revival of the Pizza Hut Restaurant business, resulting in 6.2% like-for-like growth in 2015 and 5.4% YTD 2016. In contrast with our own business performance, there has been a marked slowdown in the UK restaurant sector and this is not the right time for deriving fair value from our success.’ He continues ‘in view of our performance and organisational capability, we believe that this is one of the strongest platforms in the sector. Based on this, and with the full support of our investors, we are confident that current market conditions will allow us to develop and expand the business, and build even greater shareholder value.’

• Carlsberg reported Q1 numbers yesterday, referred to less buoyant outlook in Eastern Europe & Asia.

• Carlsberg: Q1 beer volumes down 2% but group maintained full year forecasts. Shares nonetheless down by around 3.5%.

• JDW Tuesday bought back 45k shares for cancellation. Since Jan, it has spent some £22.1m in buying back 3.25m shares.

• JDW yesterday bought back another 42,500 shares at 707p. Enterprise Inns bought back 77,600 at around 92p.

• Consumer spending fell for the second month in a row in April, as slowing wage growth, flat employment rates, and Brexit uncertainty kept growth down at 1.9%. Barclaycard data shows that supermarkets bore the brunt of reduced consumer spend, with the category’s 6.1% drop the steepest since Barclaycard records began in 2011. Consumers chose to keep going to pubs and restaurants however, where spending rose 8.4% and 11.3% respectively.

• Bill’s Restaurants has appointed former Starbucks UK manager Mark Fox as its new chief executive, writes MCA.

• Paul Newby, the pubs code adjudicator, has appeared before a Business, Innovation and Skills Select Committee to defend his suitability for the role. Newby stressed that his previous work at Fleurets would not impede his objectivity as adjudicator.

• Aldi is preparing to open a pop-up wine shop in Shoreditch Boxpark for three days, from 26-28 May, as part of London Wine Week. The pop-up will provide 20 wines from the Aldi range.

• JDW founder Tim Martin has donated £200,000 to Vote Leave, the campaign for Britain to leave the EU.

• US department store Macy’s has seen its income tumble by 40% in the first three months and the group has slashed profit forecasts for the whole year. Falling tourist numbers and strong competition from discounters like TJ Maxx and online retailers dragged revenues down 7.4% to $5.77bn. Macy’s Chairman and CEO Terry Lundgren said in a statement: ‘We are not counting on the consumer to spend more, so we are working harder to give customers more reasons to buy from us.’

• The number of people looking to buy a house in April fell to its lowest level for nearly eight years, according to the Royal Institute of Chartered Surveyors. Those who saw a drop in enquiries last month outnumbered those who saw a rise by 22%, with the upcoming EU referendum and stamp duty rise cited as contributing factors.

• Google is moving to ban ads from payday lenders as it looks to limit its contribution to what it calls a ‘harmful’ industry. The search giant will stop allowing ads for loans due within 60 days or with an interest rate of 36% or higher.

LEISURE TRAVEL:

• HVS says most recent HVS/AlixPartners Hotel Bulletin suggests ‘the peak of the hotel property market may have been reached.’

• HVS says plenty of people still coming to London. Problem appears to be, there are too many hotel rooms. HVS says ‘London remains a popular destination for Russian and Chinese visitors and investment continues to pour into the city’. That investment ‘pouring into the city’ is at least part of what’s causing the problem.

• HVS says current hotel REVPAR is rate-driven with occupancy stalled. Says ‘these figures give us a strong indication that the peak of the UK’s hotel occupancy market has been reached and the growth we are seeing now is rate driven rather than occupancy driven.’

• HVS suggests hotel rates may fall, says ‘there is a risk that some operators will cut rates in an attempt to stimulate demand’. It says others will be forced to follow suit. It suggests that capital values could then ‘soften’. That is, fall.

• HVS says has seen ‘perceptible shift in sentiment’. There is ‘a much greater sense of caution…over future growth prospects.’

• The British Hospitality Association is calling for the government to cut the rate of tourism VAT in order to plug the UK’s £13.3bn trade deficit. A study by Tourism Respect and Nevin Associates claims that reducing taxes on hotels and tourist attractions from 20% to 5% could shrink the deficit by as much as £22.2bn over a ten-year period by increasing revenue from overseas tourists and encouraging more Brits to stay at home.

• Manchester, Stansted, East Midlands and Bournemouth airports all saw passenger growth last month, as tour operators focused on destinations such as Spain and Greece. Passengers using Manchester airport rose 11.4% year-on-year. Those flying to Spain were up 25%, Greece (+27%), Italy (+23%) and Croatia (+42%).

OTHER LEISURE:

• Rank updates on Q3 (19wks to 8 May), says LfL sales growth 3%, total revenues +2%, digital revenue +6%

• Rank Q3: Grosvenor LfLs +4%, Mecca +1%. CEO Henry Birch ‘pleased with the Group’s performance.’ He says ‘we have seen continued like-for-like revenue growth across all of our brands and the performance in our Grosvenor digital business has been particularly encouraging.’ Mr Birch adds ‘during the period we launched our new digital platform which was delivered both on time and on budget. This is an important development for the Group and we look forward to the benefits the increased functionality will bring.’

• Rank Q3: LfL casino visits flat with spend +2%. Mecca visitors down 1%, spend +3%. Re outlook, group says ‘the Board is encouraged that all its brands have continued to make like-for-like progress and expects the Group’s full year performance will be in line with management’s expectations.’ It concludes ‘Rank is in a strong financial position, possesses market-leading brands with multi-channel distribution and has a clear strategy for sustained long-term growth.’

• Purplebricks has reported full-year guidance of £18.5m in revenue, up some 445% year-on-year, with figures to be revealed on 16 June.

FINANCE & MARKETS:

• Britain’s economy faltered in the three months to April partly as a result of Brexit uncertainty, according to the NIESR. The National Institute of Economic and Social Research said that GDP in the three months to April grew 0.3% on the preceding quarter, down from a rate of 0.4% in the first three months of 2016. Official data published earlier on Wednesday showed British factory output suffered its biggest annual fall in nearly three years in March, as turbulence in the UK steel industry took its toll.

• UK industry fell back into recession, shrinking for the second consecutive quarter, according to the Office for National Statistics (ONS). Manufacturing and construction continues to hold back the rest of the economy, while gains in oil and gas were offset by a 37.3% fall in steel production.

• ECB must not keep rates this low for too long says German central bank governor Jens Weidmann. It’s all a question of definition. Herr Weidmann presumably worried that we are borrowing (or stealing) too much growth from the future. He said ‘an expansionary monetary policy stance is justified for now, but we must not over-extend the period of ultra-loose monetary policy, because various risks and side effects are part and parcel of the current policy stance.’ He adds ‘the longer a central bank pursues an ultra-loose monetary policy … the greater the risk that a slight tightening of policy, or even expectations of a slight tightening of policy, will send market interest rates sharply higher.’

• World markets: UK mixed yesterday, Europe down a bit. US markets down and Far East markets lower in Thurs trade

• Oil price slightly off the top after a strong day yesterday. Currently trading at around $47.50 per barrel

RECENT WEBSITE ARTICLES – here:

•Leisure sector slowing

• Conviviality goes wholesale

• Next PLC comments on consumer spending

• Contrasting JDW & RTN

• Tweets & past blogs

Retail Roundup from Nick Bubb:

SuperGroup:
We flagged yesterday that City expectations seemed rather subdued of today’s SuperGroup Q4 update (given the recent significant weakness in the share price), even though the cold spring weather shouldn’t really have disadvantaged Superdry that much, given its focus on outerwear). So, the headline “Robust trading in final quarter completes year of strong progress” was a surprise, with Retail LFL sales booming by as much as 15.4% in the 15 weeks to April 23rd, …Some people only expected 1-2% LFL growth in Q4, but SuperGroup say “This performance reflects continued traction in e-commerce and initial benefits from our new sportswear and premium product ranges” and gross margins were firm. In terms of profits, the guidance looks OK: “Profit for the 52 week period is expected to be in the range £72.5m and £74.0m (versus £63.2m last year).
Progress in North America and China continues in line with our plans and initial losses in these markets will be in line with market guidance”. However, there is a separate announcement that joint founder and product guru James Holder is stepping down as a Director, to start an in-house design consultancy called SuperDesign Lab…which will provide some encouragement for the shorts.

BRC Conference Watch:
The prestigious annual BRC Symposium Retailing conference took place at the Whitbread Brewery in the City yesterday. We missed a good presentation in the morning on “Making a Business Fit for Growth” by CEO Catriona Marshall of Hobbycraft, due to a last-minute scheduling change, but we caught a surprisingly good presentation after lunch by the former Home Retail CEO, Terry Duddy, on Online retailing, albeit his view that Online is over-hyped sounded as if it was driven by his two non-exec Director positions at Hammerson and Debenhams…And the view of KPMG’s Retail guru David McCorquodale, in a panel session on Retailing Risks and Cyber-Security, that many companies may have “sleeper cells” embedded in their IT departments by criminal gangs waiting to exploit data breaches…lives long in the memory. Nick Bubb – nicholas_bubb@hotmail.com

Yester-tweet – Yesterday in a Nutshell: Live Tweets on Website:

(SOME OF OUR) EARLY TWEETS:

• Compass Group H1 numbers. Sees ‘strong performance delivering growth and returns to shareholders’

• Compass H1. Revenues £9.7bn (+5.8%) with operating profits +6.4% at £735m. EPS 30.8p, up 8.1% on last year

• Budweiser is to replace its name with ‘America’ on the front of its 12-oz cans and bottles from 23 May until the presidential vote in Nov

• C&C Group’s revenue for the year to 29 February fell 3.1% to €662.6m and EBITDA declined 12.4% to €122.6m

• TUI H1: ‘We are focussed on delivering our TUI Group strategy in becoming a content centric, vertically integrated tourism business.’

• TUI H1. Says ‘summer 2016 trading remains in line with our expectations.’ Should see 10% increase in underlying EBITA this year

• AlixPartners reports lower REVPAR across major UK cities in Q1 this year compared with last. It says ‘for the first time in 4yrs

• AlixPartners on hotels says ‘recently there has been a slight shift in sentiment, particularly in the investment community’

• AlixPartners on hotels says ‘some commentators believe the market has reached a peak, whether in terms of asset values or trading.’

• William Hill updates on 17wk trading, says it ‘remains in line with previous full-year operating profit guidance of £260-280m’

• UK trade deficit rose in Q1 to an 8yr high per ONS. Says imports up £1.9bn with exports only £500m higher.

LATER TWEETS:

• HVS says sluggish stats add ‘further fuel to the suggestion that the peak of the hotel property market may have been reached.’

• HVS/AP: Says ‘London remains a popular destination for Russian and Chinese visitors and investment continues to pour into the city’.

• HVS/AP: New hotel capacity, especially in London, is impacting margins but should be helping other leisure operators

• HVS says figures suggest ‘peak of the UK’s hotel occupancy market has been reached and the growth we are seeing now is rate driven’

• Outlook for hotels: HVS/AP: ‘There is a risk that some operators will cut rates in an attempt to stimulate demand’. Could help drive volume